Correlation Between Asia United and BDO Unibank
Can any of the company-specific risk be diversified away by investing in both Asia United and BDO Unibank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Asia United and BDO Unibank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia United Bank and BDO Unibank, you can compare the effects of market volatilities on Asia United and BDO Unibank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Asia United with a short position of BDO Unibank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia United and BDO Unibank.
Diversification Opportunities for Asia United and BDO Unibank
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asia and BDO is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Asia United Bank and BDO Unibank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BDO Unibank and Asia United is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Asia United Bank are associated (or correlated) with BDO Unibank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BDO Unibank has no effect on the direction of Asia United i.e., Asia United and BDO Unibank go up and down completely randomly.
Pair Corralation between Asia United and BDO Unibank
Assuming the 90 days trading horizon Asia United Bank is expected to generate 0.87 times more return on investment than BDO Unibank. However, Asia United Bank is 1.14 times less risky than BDO Unibank. It trades about 0.16 of its potential returns per unit of risk. BDO Unibank is currently generating about 0.03 per unit of risk. If you would invest 2,514 in Asia United Bank on November 19, 2024 and sell it today you would earn a total of 5,226 from holding Asia United Bank or generate 207.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.58% |
| Values | Daily Returns |
Asia United Bank vs. BDO Unibank
Performance |
| Timeline |
| Asia United Bank |
| BDO Unibank |
Asia United and BDO Unibank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia United and BDO Unibank
The main advantage of trading using opposite Asia United and BDO Unibank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia United position performs unexpectedly, BDO Unibank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BDO Unibank will offset losses from the drop in BDO Unibank's long position.| Asia United vs. Cebu Air Preferred | Asia United vs. Concepcion Industrial Corp | Asia United vs. Atlas Consolidated Mining | Asia United vs. Union Bank of |
| BDO Unibank vs. Allhome Corp | BDO Unibank vs. Transpacific Broadband Group | BDO Unibank vs. SM Investments Corp | BDO Unibank vs. Integrated Micro Electronics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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